Stories

Thu, 28 May 2026

Thu, 28 May 2026 The £5 coffee that tells a story of global economic turmoil

Coffees at some city centre outlets now cost £5. It's a story of tariffs, the climate, Gen Z cultural tastes, and savvy coffee farmers playing the market, writes Faisal Islam
1. Supply chain disruptions: Climate problems and geopolitical tensions are affecting the supply chain, leading to higher prices. 2. Geopolitical tensions: The conflict in Yemen is causing ships transporting coffee beans from Vietnam to Europe to take a longer route, increasing costs. 3. EU anti-deforestation rules: New regulations require suppliers to provide GPS coordinates of their plantations, adding to costs. 4. Changing consumer behavior: Consumers are still willing to pay higher prices for coffee, despite the price surge. 5. Premiumization: Coffee shops are increasingly focusing on selling experiences rather than just drinks, leading to higher prices. 6. Emergence of new players: Companies like Luckin Coffee and Greggs are expanding their presence in the market with innovative business models. Some interesting statistics mentioned in the article include:
* The cost of shipping coffee from Vietnam to Europe has increased by 4,000 miles due to the conflict in Yemen.
* EU anti-deforestation rules will add costs for farmers, but the exact amount is not specified.
* Luckin Coffee is chasing Starbucks for the title of world's biggest coffee chain. The article also highlights the growing popularity of cold brews and matcha among younger consumers. The author suggests that the premiumization trend in the coffee market may be here to stay, with prices remaining sticky even if raw coffee prices normalize. Overall, the article provides a nuanced understanding of the complex factors affecting the coffee market and how they are shaping consumer behavior and business strategies.